Facebook and Zynga avoid wiretapping fines for targeted ad practices

Knowing your demographic makes advertising much easier, and while information collection is a given in our constantly connected society, tech companies have gotten heat for going too far in pursuit of that information. Late last week Facebook and Zynga were able to skirt federal penalties regarding wiretapping laws concerning thier message scanning practices. However, the court held that the companies still violated terms of service agreements with customers, opening both to additional legal action. The case could have wide-ranging implications on targeted advertising.

Many messaging platforms, including Google’s Gmail, employ the practices of scanning emails for keywords to target advertisement; as a result many of these tech companies have also seen lawsuits. Plaintiffs allege that this method is an invasion of privacy and should be considered illegal under federal wiretapping prevention laws.

However in the Zynga/Facebook cases the Ninth US Circuit Court of Appeals held that scanning information in message did not actually collect context material enough to be considered a problem and ruled that the practices did not violate wiretapping laws.

In a joint opinion filed on May 8, the Ninth Circuit said, “We have consolidated these cases for this opinion and conclude that the plaintiffs in both cases have failed to state a claim because they did not allege that either Facebook or Zynga disclosed the “contents” of a communication, a necessary element of their ECPA (Electronic Communications Privacy Act) claims.”

The decision falls in line with the previous U.S. District Court ruling.

While plaintiffs will be unable to retrieve damages for the companies' violations of wiretapping laws, the opinion will allow them to file further legal action for violation of their terms of service.

This is not the first time Facebook and others have run afoul of data collection, privacy or wiretapping laws. In fact the Federal Trade Commission audits Facebook’s privacy standards frequently to ensure that everything is running smoothly.